Apple CEO Tim Cook talks Forstall, privacy, and making Macs in the USA

Cook offers more insight into the inner workings of Apple.

One major thing that's slowly but surely changing at Apple is its CEO's willingness to be more transparent with the press. On Thursday, the embargo lifted on a number of interviews with Apple CEO Tim Cook in which he discussed Steve Jobs' influence, how the creative "process" at Apple works, and the ousted Scott Forstall. One of the most notable details to come out was Cook's announcement that the company will begin manufacturing some of its Macs in the US starting in 2013. Cook also offered more details on how Apple "screwed up" its new version of Maps.

Cook told NBC News, as well as Bloomberg BusinessWeek, about the company's decision to begin manufacturing some Macs in the US next year. In both interviews, Cook was asked about what it would take for Apple to manufacture more of its products in the US; Cook responded by pointing out that the iPhone's processor and glass are made in Texas and Kentucky, respectively. But he went on to say that the company would "bring some" of its Mac production to the US in 2013, exciting those who have kept an eye on Apple's supply chain. (Take that, wish list haters!)

"We’ve been working on this for a long time, and we were getting closer to it. It will happen in 2013," Cook told BusinessWeek. "We’re really proud of it. We could have quickly maybe done just assembly, but it’s broader because we wanted to do something more substantial. So we’ll literally invest over $100 million. This doesn't mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money."

The revelation comes just days after some new iMac buyers began discovering that their machines sport an "Assembled in USA" stamp on the back. It's not an entirely new phenomenon, as Apple's build-to-order machines are often assembled in the US, but this seems to be the first time US-assembled, standard-configuration machines have begun appearing in people's homes.

A more extensive interview from NBC will air tonight, but BusinessWeek already has 11 pages of other juicy tidbits from Cook. In the interview, Cook briefly talks about having to adjust to being a "famous" public figure after being a private person for so long. "[It] has been a bit of adjustment for me, because for years I had the privilege of being anonymous. There is a great privilege in that if you’re a private person. So it’s a bit different," Cook told BusinessWeek.

But Cook says he also has great appreciation for his position at Apple, because he gets to hear so much feedback from dedicated users that other CEOs rarely receive. He described his first day at Apple when he had to cross a picket line of angry Newton users whose favorite product had just been killed by Jobs—the users cared more deeply about the product than he was used to seeing, which impressed him. "You know, I have been involved in hundreds of new product announcements, hundreds of product withdrawals. At one of the companies I worked at, not to mention any names, we’d put [new products] in the lobby. We’d get on the employee intercom system and say, 'Come look at them,' and nobody came. They didn't even care," Cook said.

Cook also went into detail about the creative process at Apple—or lack thereof, as the case may be. Although the company's head executives hold regular—and lengthy—meetings to discuss every product, Cook said they expect every single employee at Apple to be innovative:

"So just to be clear, I wouldn't call that a process. Creativity and innovation are something you can’t flowchart out. Some things you can, and we do, and we’re very disciplined in those areas. But creativity isn't one of those. A lot of companies have innovation departments, and this is always a sign that something is wrong when you have a VP of innovation or something. You know, put a for-sale sign on the door."

The recent departure of iOS software head Scott Forestall and retail head John Browett also came up, with Cook issuing a carefully even-handed comment about the value of collaboration at Apple. Based on inside reports about Forstall's relations with other executives, it sounds as if he was more the head-butting type than the collaborative type—a trait that ultimately made him a poor fit for Cook's Apple.

Regarding iOS 6's Maps, which saw a poor public reception that prompted a public apology from Cook earlier this year, Cook emphasized that Apple simply "screwed up" in its attempt to offer a good customer experience. Cutting off its mapping relationship with Google was supposedly not the main reason for moving forward with its own version of Maps—Cook said Apple had a number of new features in mind that could only be done internally, and it just didn't turn out well upon first release.

"So what are we doing? We’re putting all of our energy into making it right. And we have already had several software updates. We’ve got a huge plan to make it even better. It will get better and better over time. But it wasn't a matter that we… decided strategy over customers. We screwed up. That’s the fact," Cook said.

Both interviews touch on plenty of other details about the inner workings of Apple, Cook's relationship with Terry Gou at Foxconn, Apple's attitude about being a "patriotic" company, the purpose of Apple's investment firm—Braeburn Capital—and more. We'll be watching the NBC interview when it airs tonight and report back with some notes about any additional highlights that weren't discussed by BusinessWeek.

The reason I like manufacturing being done locally is that it means a global corporation isn't exploiting cheap labor in a less fortunate area of the world. There will always be regions of the world that are not well organized or have experienced recent enough turmoil such that there is a labor force willing to work for extremely little compensation. Outsourcing manufacturing to these places may help the laborers there somewhat, but it also ensures that manufacturing personnel will always be poorly compensated. I would prefer to live in a world where companies choose to pay good wages to their laborers rather than seeking out a work force so unfortunate that low wages are accepted.

Love 'em, hate 'em, indifferent, for quite a while now Apple has been setting trends that other companies have been following. Lets hope that bringing back manufacturing from China is another trend that catches on. Aren't Google's new nexus lines made in the USA as well?

If they actually moved the majority of their production to America for their iOS line and paid a real living wage to American factory workers it would be the most significant thing that Apple could do to make me consider switching to the iPhone.

I don't much like Apple, but if they actually accepted the negligibly lowered profits to help spread some of the absurd wealth they're collecting back to real Americans it would go a VERY LONG way in changing my low opinion of their corporation.

Love 'em, hate 'em, indifferent, for quite a while now Apple has been setting trends that other companies have been following. Lets hope that bringing back manufacturing from China is another trend that catches on. Aren't Google's new nexus lines made in the USA as well?

The Nexus Q was, but I've heard nothing about their other items. At the prices they're offering the Nexus 7 and 4 at I'd highly doubt they're manufactured in the USA.

Not sure I like this more public CEO stuff. Makes speculating about Apple a fair bit less fun.

goreproductions wrote:

"Apple's attitude about being a "patriotic" company,"LOL !So Patriotic we make sure to use every and all Tax Loopholes just like every other real Patriot Does !Apple Equals 1984 Now

Not using those loopholes would be leaving money on the table. Leaving money on the table reduces shareholder value and is not the American thing to do. Q.E.D. :-p

Just kidding, but the IRS has plenty of information on tax credits and deductions on their website. Most Americans do not, in fact make use of every credit or deduction that they can and leave plenty of money on the table in that way. It’s not even hard to read and follow them, and government websites have come a long way, i.e. you can find the necessary information to make use of these in the navigation bar at the top of the page clearly labeled as such rather than fruitlessly hunting around a very poorly designed page.

I am no Apple fan but I like the idea that if they can bring a few dozen manufacturing jobs here to the US then that a a potentially good effect on the economy wherever it will be located. I for one believed Jobs when he told Obama that the majority of manufacturing of products will never return to the US. Maybe Cook could help Apple make that a little less true. I also am not a blue collar worker be any means but there are still plenty of those people in the US that we could use some manufacturing here.

Love 'em, hate 'em, indifferent, for quite a while now Apple has been setting trends that other companies have been following. Lets hope that bringing back manufacturing from China is another trend that catches on. Aren't Google's new nexus lines made in the USA as well?

No, just the Nexus Q TV thing was made in the USA. To big headlines and fanfares. Then quietly pulled off the market a few weeks later.

"Apple's attitude about being a "patriotic" company,"LOL !So Patriotic we make sure to use every and all Tax Loopholes just like every other real Patriot Does !Apple Equals 1984 Now

If you don't like the tax loopholes, direct your attention to the jackasses that put them in place, not the businesses who legally take advantage of them.

Sorry, but it is perfectly reasonable to criticize people when they act in an immoral manner. Legality and morality aren't always in alignment.

With that said, I have no idea who is taking advantage of which loophole... and/or behaving immorally.

It may be reasonable to criticise perceived immorality, but it's not very productive. That way be dragons. Not that I agree with it, but some could argue that the taxes (when reduced ad absurdum to 'theft by government') themselves are immoral. Then your argument devolves from your original topic, and the s/n ratio drops precipitously.

"Apple's attitude about being a "patriotic" company,"LOL !So Patriotic we make sure to use every and all Tax Loopholes just like every other real Patriot Does !Apple Equals 1984 Now

If you don't like the tax loopholes, direct your attention to the jackasses that put them in place, not the businesses who legally take advantage of them.

Unfortunately "the jackasses that put them in place" in many cases are not genuises that can forsee all the legimitate uses and the unintended consequences of their legislation. So the body gets the votes together and votes for the legislation and then the President signs it making it the law of the land.

Well with tax law over one million tax lawyers and CPAs in the US start looking at ways that they can legally minimize tax liability. Many can play the super grey areas and fringes of the law because if they end up in tax court they can out gun the Government with better lawyers and in many cases win.

So like any system put into place the tax code is hacked and ingenious systems like the "Dutch Sandwich" and others are devised. It is then incumbent upon the legislators (jackasses?) to close those loopholes, however the closures will then be hacked by the one million tax lawyers and CPAs creating other ingenious systems that legally minimize tax liability.

Patriotism has nothing to do with this. The principals of a corporation have a fiduciary duty to the shareholders (or other owners of the business) to maximize profit.

I am no Apple fan but I like the idea that if they can bring a few dozen manufacturing jobs here to the US then that a a potentially good effect on the economy wherever it will be located. I for one believed Jobs when he told Obama that the majority of manufacturing of products will never return to the US. Maybe Cook could help Apple make that a little less true. I also am not a blue collar worker be any means but there are still plenty of those people in the US that we could use some manufacturing here.

A few dozen? Take off the glasses. Apple ships dozens of thousands of Macs a week. If some portion of those are made here, you're going to need more than fifty people to make it happen.

Your post almost reads as if you're naive about the actual makeup of American jobs. Visit the deep south and poor areas around this country - all those call center jobs are "blue collar", like it or not.

If they actually moved the majority of their production to America for their iOS line and paid a real living wage to American factory workers it would be the most significant thing that Apple could do to make me consider switching to the iPhone.

I don't much like Apple, but if they actually accepted the negligibly lowered profits to help spread some of the absurd wealth they're collecting back to real Americans it would go a VERY LONG way in changing my low opinion of their corporation.

What do you think of a tax holiday so that Apple, Inc. could repatriate the Billions overseas without the 35% tax hit under current law? As it is those Billions will remain overseas until either the tax is reduced enough or temporarily eliminated. If they repatriated the Billions would it change your opinion of Apple, Inc.?

If they actually moved the majority of their production to America for their iOS line and paid a real living wage to American factory workers it would be the most significant thing that Apple could do to make me consider switching to the iPhone.

I don't much like Apple, but if they actually accepted the negligibly lowered profits to help spread some of the absurd wealth they're collecting back to real Americans it would go a VERY LONG way in changing my low opinion of their corporation.

So are you fine with supporting other companies who don't make "absurd wealth" but still use cheap non-American labor?

Would it be fair to say that when the savings is in your pocket its okay for cheap labor, but when its in Apple's its not?

Does this same thing apply to other products you use as well? Do you determine which clothes to buy based on the profits of the company and the wages of the employees who make them?

I am all for US manufacturing and paying good wages, don't get me wrong. But I have to question when people just say it about one company and not others.

For all of Job's good work at Apple, it's hard to hate Cook's apparent direction. More transparency and fostering a domestic supply chain are very positive goals. I hope the trend continues.

I concur. Perhaps this transparency from the top can lead to more openness overall at Apple. And here's to hoping that the ousting of Forstall leads to better overall design being implemented into iOS.

I wonder how the manufacturing in the US will do to their bottom line? Assuming Apple is taking the excess in the difference of labor costs straight to their profits, wouldn't bringing this back to the US where labor is more expensive cut into that? I look forward to seeing how this part plays out and whether Apple eats the additional cost, works out some crazy contract to keep labor costs the same with whoever they contract to, or do they raise prices because the shareholders don't like the earnings falling?

"Apple's attitude about being a "patriotic" company,"LOL !So Patriotic we make sure to use every and all Tax Loopholes just like every other real Patriot Does !Apple Equals 1984 Now

If you don't like the tax loopholes, direct your attention to the jackasses that put them in place, not the businesses who legally take advantage of them.

Sorry, but it is perfectly reasonable to criticize people when they act in an immoral manner. Legality and morality aren't always in alignment.

With that said, I have no idea who is taking advantage of which loophole... and/or behaving immorally.

Criticize away, it is all "sound and fury signifying nothing". What does immorality have to do with hacking systems that are invented by others?

In your moral world is it moral to have an Estate tax (aka Death tax) that is a double tax on the families of people whose gross adjusted assets are above a certain exclusionary number when the full taxes due were paid while the decedant was alive? Is "redistribution" of wealth moral in your moral world? If so at what level of gross adjusted assets should the families of the deceased have to pay the Death tax - $1,000, $10,000, $100,000, 1,000,000, 10,000,000, higher, lower?

Remember in 2010 the Death tax was $0.00 because Congress did nothing about the Estate tax when they extended the so-called "Bush Tax Cuts". In other years the Estate tax was around 50% of the gross adjusted asstes of the estate with a $1,000,000 exclusion.

Edit: Eh hell, I'll expand a little. I usually haven't had much positive to say about Apple, but with Cook running the show, I've been finding more and more positives.

1) Increasing domestic production is a big thing. There are some of us who honestly do try to buy products made in the USA. To me, this shows that at least at little bit, Apple "gets" the big picture. Simply put, people with jobs/income buy things. Those things will include the products you make.

2) Opening up to the public..... good move. Yes, portraying the genius savant who hides behind closed doors and creates "miracle products" has a certain magic to it. Portraying the efforts of the whole company, and the work that goes into those products, showing what you do involves the work and contributions of many dedicated individuals...... is a big fat gold star to your crew. Having a CEO that shows some pride in what their company does by opening the doors a bit to it..... that would make me want to work for you.

3) Owning up to your screw-ups, without excuses (i.e. ... you hold your phone wrong obviously)?..... Accountability. Love it. Good step. You admitted you screwed up. Show that you are taking action to correct it, and take care of your customer.... and you will win people over.

Again, to me, this is great news from Apple. They keep this up and I will send money their way again. Now just get an upgraded Mac Pro that is at least assembled in the USA. (my wish to you Mr. Cook).

"Apple's attitude about being a "patriotic" company,"LOL !So Patriotic we make sure to use every and all Tax Loopholes just like every other real Patriot Does !Apple Equals 1984 Now

If you don't like the tax loopholes, direct your attention to the jackasses that put them in place, not the businesses who legally take advantage of them.

Sorry, but it is perfectly reasonable to criticize people when they act in an immoral manner. Legality and morality aren't always in alignment.

With that said, I have no idea who is taking advantage of which loophole... and/or behaving immorally.

It's also worth remembering that historically, "patriotism" is almost always a very bad thing. It's also a bad thing for all of Apple's customers *except* those who live in the USA (roughly 50%).

So the real calculation here is ... Is it worth insulting half your customers, putting the company in financial danger, and rasing prices and lowering margins across the board just to serve some misguided idea of "patriotism" from the 1950's?

So are you fine with supporting other companies who don't make "absurd wealth" but still use cheap non-American labor?

Would it be fair to say that when the savings is in your pocket its okay for cheap labor, but when its in Apple's its not?

Does this same thing apply to other products you use as well? Do you determine which clothes to buy based on the profits of the company and the wages of the employees who make them?

I am all for US manufacturing and paying good wages, don't get me wrong. But I have to question when people just say it about one company and not others.

No, I'm not fine with it. Right now I don't have a choice of phone manufacturer that does the majority of their production in the USA.

If a company produced in the USA and had a product that approached the quality of others in the field I'd definitely go with that company first.

Apple moving to USA production would still leave their products lower than others in desirability for a multitude of reasons, but having Americans get paid a living wage rather than Asians working for slave rates would be the most significant thing Apple could do to move me to their product line.

Going open source and opening up their ecosystem while dropping their absurd lawsuits vs other Android OEMs would be the second most compelling thing they could do.

If they actually moved the majority of their production to America for their iOS line and paid a real living wage to American factory workers it would be the most significant thing that Apple could do to make me consider switching to the iPhone.

I don't much like Apple, but if they actually accepted the negligibly lowered profits to help spread some of the absurd wealth they're collecting back to real Americans it would go a VERY LONG way in changing my low opinion of their corporation.

What do you think of a tax holiday so that Apple, Inc. could repatriate the Billions overseas without the 35% tax hit under current law? As it is those Billions will remain overseas until either the tax is reduced enough or temporarily eliminated. If they repatriated the Billions would it change your opinion of Apple, Inc.?

Under no circumstances should there ever be a "tax holiday" for corporations. They should be dealt with in ways they compel them to repatriate their money AND pay taxes on it.

Tax holidays only ensure that money will be horded outside of the country until such a time that there is another such "holiday".

Until American can buy food, pay the rent, and pay for goods and transportation as cheaply as you can in Asia the manufacturing will never move back here. That "living wage" people mention is quite different between here and there because living COST less over there than it does here. And that is completely in the control of the people making the profit.

Criticize away, it is all "sound and fury signifying nothing". What does immorality have to do with hacking systems that are invented by others?....

What an absolute f*cking ridiculous thing to say. Of course it's immoral to evade or skirt around a law or provision for your own personal gain at the expense of others. It's practically the very definition of it.

A hackers intention is to find a weakness or loophole in a system and then *show* it to those in command of that system. They are finding loopholes so as to *squash* loopholes and there is no personal gain for them.

The tax evader on the other hand is a borderline criminal acting on their own interest with the intention of screwing over their neighbours and gaining money in return.

So are you fine with supporting other companies who don't make "absurd wealth" but still use cheap non-American labor?

Would it be fair to say that when the savings is in your pocket its okay for cheap labor, but when its in Apple's its not?

Does this same thing apply to other products you use as well? Do you determine which clothes to buy based on the profits of the company and the wages of the employees who make them?

I am all for US manufacturing and paying good wages, don't get me wrong. But I have to question when people just say it about one company and not others.

No, I'm not fine with it. Right now I don't have a choice of phone manufacturer that does the majority of their production in the USA.

If a company produced in the USA and had a product that approached the quality of others in the field I'd definitely go with that company first.

Apple moving to USA production would still leave their products lower than others in desirability for a multitude of reasons, but having Americans get paid a living wage rather than Asians working for slave rates would be the most significant thing Apple could do to move me to their product line.

Going open source and opening up their ecosystem while dropping their absurd lawsuits vs other Android OEMs would be the second most compelling thing they could do.

What all you Americans are not seeing is that "Made in USA" is actually a giant *negative* for most folks who live outside of the USA. In general, it means lower quality, and more expensive goods.

Half of Apple's customers are not based in the USA.

The consumer response to this "made in USA" program will not be what you expect.

If they actually moved the majority of their production to America for their iOS line and paid a real living wage to American factory workers it would be the most significant thing that Apple could do to make me consider switching to the iPhone.

I don't much like Apple, but if they actually accepted the negligibly lowered profits to help spread some of the absurd wealth they're collecting back to real Americans it would go a VERY LONG way in changing my low opinion of their corporation.

So are you fine with supporting other companies who don't make "absurd wealth" but still use cheap non-American labor?

Would it be fair to say that when the savings is in your pocket its okay for cheap labor, but when its in Apple's its not?

Does this same thing apply to other products you use as well? Do you determine which clothes to buy based on the profits of the company and the wages of the employees who make them?

I am all for US manufacturing and paying good wages, don't get me wrong. But I have to question when people just say it about one company and not others.

There is, as you apparently recognize, a difference between the profit margins that Walmart and Apple make on cheap sweatshop labor. Walmart drops their prices when they lower their cost, Apple maintains the high premiums and keeps the difference for themselves. Don't get me wrong, Walmart is a very profitable company, but given the huge difference between Walmart's and Apple's volume, a small raise in unit cost would matter far more to Walmart's shareholders than it would Apple's.

I heartily expect a good chunk of the Ars crowd to accept Apple rationale at wholesale, but don't get too caught up in the "patriotism" of onshoring jobs - it's a strictly economic decision. This is a trend that is a direct result of the weakening US dollar, combined with dramatically increased wages and domestic demand in China. Cheaper places like Vietnam and Thailand simply don't have the infrastructure to compete effectively....yet. But when they do, expect more offshoring unless we remain cost competitive.

What all you Americans are not seeing is that "Made in USA" is actually a giant *negative* for most folks who live outside of the USA. In general, it means lower quality, and more expensive goods.

What, moving production from cheap Asian sweatshops would mean lower quality? Apple is hardly the first company to reconsider off shoring. I've heard horror stories from companies that had seen entire shipments thrown away because of the absolutely shoddy labor they were getting from Asia.

Quote:

Half of Apple's customers are not based in the USA.

The consumer response to this "made in USA" program will not be what you expect.

Products for the European market could be made in *gasp* Europe. USA and China are not the only countries in the entire world with manufacturing expertise.

So are you fine with supporting other companies who don't make "absurd wealth" but still use cheap non-American labor?

Would it be fair to say that when the savings is in your pocket its okay for cheap labor, but when its in Apple's its not?

Does this same thing apply to other products you use as well? Do you determine which clothes to buy based on the profits of the company and the wages of the employees who make them?

I am all for US manufacturing and paying good wages, don't get me wrong. But I have to question when people just say it about one company and not others.

No, I'm not fine with it. Right now I don't have a choice of phone manufacturer that does the majority of their production in the USA.

If a company produced in the USA and had a product that approached the quality of others in the field I'd definitely go with that company first.

Apple moving to USA production would still leave their products lower than others in desirability for a multitude of reasons, but having Americans get paid a living wage rather than Asians working for slave rates would be the most significant thing Apple could do to move me to their product line.

A very reasonable response!

jackstrop wrote:

Going open source and opening up their ecosystem while dropping their absurd lawsuits vs other Android OEMs would be the second most compelling thing they could do.

I think you don't understand Apple. If this is what you want, then Android is certainly the choice for you. Asking Apple to mimic the Android strategy is kind of like asking Google to close their system.

Having multiple types of ecosystems is good. Many like the open approach to Android, and other like the "walled garden" that Apple provides. If either ceased to exist, then that would be a loss for consumers.

What all you Americans are not seeing is that "Made in USA" is actually a giant *negative* for most folks who live outside of the USA. In general, it means lower quality, and more expensive goods.

But that depends on what it is, doesn't it? And when. For turbines and cpus, you might still look for the USA label. Other things, not so much. It's nice to see the rest of the world coming up.

Also, as far as the value of the dollar making our exports expensive; our last two presidents have been working on that for you..

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Half of Apple's customers are not based in the USA.

Yay!

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The consumer response to this "made in USA" program will not be what you expect.

Maybe not. Those are tough factories to emulate. A unique mix of automation and hands-on that perhaps only the Chinese could have perfected.

But we will learn from them as they learned from us. Sooner or later, the Chinese and everybody else will have as much money as we do; a car, a washer-dryer, steak once a week,.. all that. On that day, we win.

Corporations aren't patriotic because in our global society, few are concentrated in a single country to feel any dedication to. They go to the country with customers, resources and labor. They do not care if it is authoritarian or democratic. They do not care if the country is rich or poor as long as it suits their needs. Poor countries have cheap resources and labor. Rich countries have customers.

Apple may have its headquarters here and most of it's R&D. However, as a company I imagine it sees most Americans as nothing more than simple consumers to use their products. We Americans cost too much to hire as laborers but we're good enough for our checkbooks. But as long as we got our Angry Birds, we're happy.

Corporations, and those who run them, Capitalists, care nothing for country. They care only for money and power.